US markets tumbled under the challenge of a new open-source AI release from China, ‘DeepSeek’. This new AI was tested and came up Trumps against their American competitors, while initially costing a miniscule $6million, to set up. The impact may be far reaching as much of the equity markets upward momentum has been built on the AI revolution. The US Dollar regained some momentum, with the EUR slipping back below 1.0500, while the GBP relinquished 1.2500. The Fed will meet this week and decide if interest rates will continue to be cut. The markets are expecting a hold, in line with the Fed’s recent commentary, but Trump has called loudly for cuts. The ECB will also meet and it appears they are more likely to hear the calls from Trump, and cut rates a further 25 basis points.The rise in the reserve pushed the AUD back below 0.6300, while the NZD surrendered 0.5700. Growth and inflation will be keenly watched this week and their relationship with interest rates and Central Banks.
